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Appeals court denies St. Joseph's claims about hospital sale

ATLANTA — A federal appeals court ruled Thursday that Hospital Management Associates owes nothing for declining to buy St. Joseph Hospital, which has since become Trinity Hospital.

HMA completed negotiations with the St. Joseph board in December 2005 to transfer the 231-bed facility for $75 million.

Though HMA issued news releases announcing the pending sale, installed its computer system and trained hospital employees on its procedures, it never signed the asset-sale agreement.

HMA’s new president, who came on board the next month, grew leery of the purchase and killed it one day before the Georgia attorney general was to hold a public hearing on the transaction necessary for its approval.

The hospital eventually sold for $37 million, and the St. Joseph board sued HMA for the difference.

After losing the lawsuit in federal district court, the board sought relief from the 11th Circuit U.S. Court of Appeals in Atlanta; however, a three-judge panel on the appellate court also ruled against the board Thursday.

The board argued that HMA executives had signed a letter of intent and made public statements that an agreement had been reached.

The appellate decision, written by Judge Gerald Tjoflat, cites the conditional wording of documents the hospital and HMA submitted to the Federal Trade Commission and the U.S. Department of Justice.

“The Letter of Intent, coupled with (the hospital board’s) representation in the premerger notification filed with the FTC and the DOJ – that the parties would not execute a ‘binding Asset Sale Agreement’ until the Georgia attorney general approved it – establishes as a matter of law that (St. Joseph) could not reasonably rely on HMA’s ‘promise’ to purchase its hospital assets,” Tjoflat wrote.